These days most software solutions align with highly commoditized markets in a relatively short time. So it is essential for software vendors to attract customers, and eventual sales, through true ROI and through differentiation other than feature/function sets. Market Intelligence programs, in collaboration with product marketing, are important sources of comprehensive research, analysis and recommendations for providing the elements of a software solution that can set it apart, from the customer perspective. Given the rapid pace of the software industry, market intelligence programs would benefit from a provocation-based methodology, as described by Geoffrey Moore et al.
Commoditized markets are buyers markets, where price tends to rule. So customers may well consider “lesser” solutions that are cheaper and usually easier to implement and use, rather than stick to incumbent solutions that have become bloated with too many features. Market intelligence programs should focus on analyzing these alternative solutions to understand the value perceived by customers, and the fresher approach these software solutions are leveraging.
Instead of falling into the trap of battling traditional competitors in feature-function wars, software companies should be learning from newer entrants into their target markets in order to maintain competitive edge. Otherwise, the risk is falling hopelessly behind customer expectations for new and important changes in the market and the software solutions that address this market.
The notion of provocation-based market intelligence derives from an “unexpected” and innovative POV for what solutions should be offered to target customers. Generally provocative issues will be strategic, will matter more to customer management teams (preferably C-level), should be somewhat surprising but relate to known issues for the customer, and inspire a desire to find a solution. Through strategic Market Intelligence, the development of a customer-oriented “provocation” derives from aligning capabilities of solutions to the strategic business needs of customers – in a real and legitimate way. The analysis performed by market intelligence programs will also reveal the gaps that must be filled to provide the whole solution, again from the customer perspective.
Provocation-based market intelligence helps software companies see their competitive challenges from a new perspective that focuses on the specific pain points of customers where true urgency can be invoked, in order to attach greater importance on the solutions for such pain points offered by the software company. The software vendor has to make it crystal clear to customers that the problems must be handled, and that doing nothing is not at all possible because too much is at stake for the health of the customers’ companies (or alternatively, customers will lose competitive advantage if they do not solve these problems, preferably by using the software company’s solution.
A new angle of what should be significant issues for target customers is essential to capture customer interest. Provocation-based market intelligence can be extremely valuable in looking at a problem in “unusual” ways to identify innovative views of the problem as well as unexpected approaches to the solution. Market intelligence can also be leveraged to ensure that the customer’s perspective is maintained as a “reality check”.
To truly connect to and convince customers, domain expertise is essential. The “conversation” with customers must show that the software company really understands the issue/problem and the risk of not resolving it. Benefit must be shown clearly. A decent plan needs to be articulated. Data, real-world examples, next steps, all are important to gain customer confidence and buy-in. Domain expertise will come in part from Market Intelligence but will also come from other teams in the software company or even consulting partners.
Employing provocation-based Market Intelligence should help software companies avoid the “me too” trap of emulating the other vendors in the competitive landscape. It will jumpstart original thinking and better focus on target customer needs.
Collaborative work in the software company is necessary to devise the most fruitful provocations that are aligned with solutions that realistically can be provided by the software company. The collaborative attitude should also extend to target customer interactions to make sure the customer finds the provocation of importance, to fine-tune the solution approach, and then function as a true solution partner for customer success.
About the author: Julie Hunt is an accomplished market intelligence analyst, providing strategic market and competitive insights for the software industry. Her 20+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing. Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Market & Competitive Intelligence Services
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